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FORTY-FIFTH DAY

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MORNING SESSION

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Senate Chamber, Olympia, Wednesday, February 24, 1999

      The Senate was called to order at 10:00 a.m. by President Owen. The Secretary called the roll and announced to the President that all Senators were present except Senator Oke. On motion of Senator Honeyford, Senator Oke was excused.

      The Sergeant at Arms Color Guard consisting of Pages Dionika Knight and Kevin Kline, presented the Colors. Reverend Doug Dornhecker, pastor of the First Christian Church of Olympia, offered the prayer.

MOTION

      On motion of Senator Betti Sheldon, the reading of the Journal of the previous day was dispensed with and it was approved.

REPORTS OF STANDING COMMITTEES

February 23, 1999

SB 5106             Prime Sponsor, Senator Eide: Providing for the safe decontamination or destruction of residential property used for illegal drug manufacturing or storage. Reported by Committee on Environmental Quality and Water Resources

      MAJORITY Recommendation: Do pass. Signed by Senators Fraser, Chair; Eide, Vice Chair; Honeyford, Jacobsen, McAuliffe, Morton and Swecker.

      Passed to Committee on Rules for second reading.

February 22, 1999

SB 5263             Prime Sponsor, Senator Morton: Exempting horse training businesses from state taxes. Reported by Committee on Agriculture and Rural Economic Development

      MAJORITY Recommendation: Do pass and be referred to Committee on Ways and Means. Signed by Senators Rasmussen, Chair; T. Sheldon, Vice Chair; Honeyford, Morton, Snyder and Swecker.

      Referred to Committee on Ways and Means.

February 22, 1999

SB 5418             Prime Sponsor, Senator McAuliffe: Changing school accountability and assistance provisions. Reported by Committee on Education

      MAJORITY Recommendation: That Substitute Senate Bill No. 5418 be substituted therefor, and the substitute bill do pass. Signed by Senators McAuliffe, Chair; Eide, Vice Chair; Bauer, Brown, Goings, Kohl-Welles and Rasmussen.

MINORITY Recommendation: Do not pass substitute. Signed by Senators Benton, Finkbeiner, Hochstatter, Sellar and Swecker.

      Passed to Committee on Rules for second reading.

February 22, 1999

SB 5437             Prime Sponsor, Senator Thibaudeau: Reimbursing podiatric physicians and surgeons. Reported by Committee on Health and Long-Term Care

      MAJORITY Recommendation: Do pass as amended. Signed by Senators Thibaudeau, Chair; Wojahn, Vice Chair; Costa, Deccio, Franklin, Johnson and Winsley.

      Passed to Committee on Rules for second reading.

February 22, 1999

SB 5547             Prime Sponsor, Senator McAuliffe: Providing medical assistance in public schools. Reported by Committee on Education

      MAJORITY Recommendation: That Substitute Senate Bill No. 5547 be substituted therefor, and the substitute bill do pass. Signed by Senators McAuliffe, Chair; Eide, Vice Chair; Bauer, Benton, Brown, Finkbeiner, Goings, Hochstatter, Kohl-Welles, Rasmussen, Sellar and Swecker.

      Passed to Committee on Rules for second reading.

February 22, 1999

SB 5560             Prime Sponsor, Senator Franklin: Revising provisions relating to supported employment for persons with severe disabilities. Reported by Committee on Health and Long-Term Care

      MAJORITY Recommendation: Do pass. Signed by Senators Thibaudeau, Chair; Wojahn, Vice Chair; Costa, Deccio, Franklin, Johnson and Winsley.

      Passed to Committee on Rules for second reading.

February 22, 1999

SB 5590             Prime Sponsor, Senator Thibaudeau: Expanding the health professionals who may request administration of oral medication at school. Reported by Committee on Health and Long-Term Care

      MAJORITY Recommendation: That Substitute Senate Bill No. 5590 be substituted therefor, and the substitute bill do pass. Signed by Senators Thibaudeau, Chair; Wojahn, Vice Chair; Costa, Deccio, Franklin, Johnson and Winsley.

      Passed to Committee on Rules for second reading.

February 22, 1999

SB 5594             Prime Sponsor, Senator Rasmussen: Enhancing economic vitality. Reported by Committee on Agriculture and Rural Economic Development

      MAJORITY Recommendation: That Substitute Senate Bill No. 5594 be substituted therefor, and the substitute bill do pass and be referred to Committee on Ways and Means. Signed by Senators Rasmussen, Chair; T. Sheldon, Vice Chair; Gardner, Honeyford, Morton, Prentice, Snyder and Swecker.

      Referred to Committee on Ways and Means.

February 22, 1999

SB 5607             Prime Sponsor, Senator Thibaudeau: Permitting retired and disabled employees to obtain health insurance. Reported by Committee on Health and Long-Term Care

      MAJORITY Recommendation: That Substitute Senate Bill No. 5607 be substituted therefor, and the substitute bill do pass. Signed by Senators Thibaudeau, Chair; Wojahn, Vice Chair; Costa, Franklin, Johnson and Winsley.

      Passed to Committee on Rules for second reading.

February 23, 1999

SB 5620             Prime Sponsor, Senator Long: Revising provisions relating to chemical dependency treatment services. Reported by Committee on Human Services and Corrections

      MAJORITY Recommendation: That Substitute Senate Bill No. 5620 be substituted therefor, and the substitute bill do pass and be referred to Committee on Ways and Means. Signed by Senators Hargrove, Chair; Costa, Vice Chair; Franklin, Kohl-Welles, Long, Patterson and Zarelli.

      Referred to Committee on Ways and Means.

February 22, 1999

SB 5626             Prime Sponsor, Senator Franklin: Changing disbursement of medicaid incentive payments to school districts. Reported by Committee on Education

      MAJORITY Recommendation: That Substitute Senate Bill No. 5626 be substituted therefor, and the substitute bill do pass. Signed by Senators McAuliffe, Chair; Eide, Vice Chair; Bauer, Benton, Brown, Finkbeiner, Goings, Hochstatter, Kohl-Welles, Rasmussen, Sellar and Swecker.

      Passed to Committee on Rules for second reading.

February 22, 1999

SB 5739             Prime Sponsor, Senator Thibaudeau: Preparing certificates of death or fetal death. Reported by Committee on Health and Long-Term Care

      MAJORITY Recommendation: Do pass. Signed by Senators Thibaudeau, Chair; Wojahn, Vice Chair; Costa, Deccio, Franklin, Johnson and Winsley.

      Passed to Committee on Rules for second reading.

February 22, 1999

SB 5839             Prime Sponsor, Senator Patterson: Making seller's real estate disclosures more accurate. Reported by Committee on State and Local Government

      MAJORITY Recommendation: That Substitute Senate Bill No. 5839 be substituted therefor, and the substitute bill do pass. Signed by Senators Patterson, Chair; Gardner, Vice Chair; Haugen, Horn, Kline and McCaslin.

      Passed to Committee on Rules for second reading.

February 23, 1999

SB 5854             Prime Sponsor, Senator Hargrove: Providing for a hunger survey project. Reported by Committee on Human Services and Corrections

      MAJORITY Recommendation: Do pass and be referred to Committee on Ways and Means. Signed by Senators Hargrove, Chair; Costa, Vice Chair; Franklin, Kohl-Welles, Long, Patterson and Zarelli.

      Referred to Committee on Ways and Means.

February 23, 1999

SB 5865             Prime Sponsor, Senator Kohl-Welles: Clarifying language regarding guardianship fees. Reported by Committee on Human Services and Corrections

      MAJORITY Recommendation: Do pass and be referred to Committee on Ways and Means. Signed by Senators Hargrove, Chair; Costa, Vice Chair; Kohl-Welles, Long, Patterson and Zarelli.

      Referred to Committee on Ways and Means.

REPORTS OF STANDING COMMITTEES

GUBERNATORIAL APPOINTMENTS

February 23, 1999

GA 9025            JOSEPH D. LEHMAN, appointed March 10, 1997, for a term ending at the Governor's pleasure, as Secretary of the Department of Corrections.

                           Reported by Committee on Human Services and Corrections

      MAJORITY Recommendation: That said appointment be confirmed: Signed by Senators Hargrove, Chair; Costa, Vice Chair; Franklin, Kohl-Welles, Long and Patterson.

      Passed to Committee on Rules.

February 18, 1999

GA 9070            MARSHA TADANO LONG, appointed January 15, 1997, for a term ending at the Governor's pleasure, as Director of the Department of General Administration.

                           Reported by Committee on State and Local Government

      MAJORITY Recommendation: That said appointment be confirmed: Signed by Senators Patterson, Chair; Gardner, Vice Chair; Haugen, Horn, Kline and McCaslin.

      Passed to Committee on Rules.

February 18, 1999

GA 9074            H. GEORGE MORTON, appointed March 10, 1998, for a term ending at the Governor's pleasure, as Director of the Department of Printing.

                           Reported by Committee on State and Local Government

      MAJORITY Recommendation: That said appointment be confirmed: Signed by Senators Patterson, Chair; Gardner, Vice Chair; Haugen, Horn, Kline and McCaslin.

      Passed to Committee on Rules.

February 23, 1999

GA 9160            JOHN PERRYMAN, appointed September 29, 1998, for a term ending October 1, 2002, as a member of the Small Business Export Finance Assistance Center Board of Directors.

                           Reported by Committee on Commerce, Trade, Housing and Financial Institutions

      MAJORITY Recommendation: That said appointment be confirmed: Signed by Senators Prentice, Chair; Shin, Vice Chair; Benton, Gardner, Hale, Heavey, Rasmussen, T. Sheldon and West.

      Passed to Committee on Rules.

INTRODUCTION AND FIRST READING

SB 6036             by Senators Goings, Johnson, Hargrove, Winsley, T. Sheldon, Brown, Sellar, Snyder, Costa, Rasmussen and Kohl-Welles

AN ACT Relating to a Washington state law enforcement memorial as part of the heritage park development project; creating a new section; and making an appropriation.

Referred to Committee on Ways and Means.

SB 6037             by Senators Shin and Prentice

AN ACT Relating to rescinding a retirement allowance agreement; amending RCW 41.40.188; and creating a new section.

Referred to Committee on Ways and Means.

SB 6038             by Senators Prentice, Benton, Winsley, Kline, B. Sheldon, Fairley, Heavey, Goings, Shin, T. Sheldon and Rasmussen

AN ACT Relating to an actuarial reduction at the time of retirement; amending RCW 41.32.765, 41.35.420, and 41.40.630; and providing an effective date.

Referred to Committee on Ways and Means.

SB 6039             by Senators Benton, Rasmussen, Prentice, Winsley, Shin, Hale, T. Sheldon, Deccio, West and Bauer

AN ACT Relating to the definition of "combined disposable income"; amending RCW 84.36.383; and creating a new section.

Referred to Committee on Ways and Means.

SB 6040             by Senators B. Sheldon, T. Sheldon, Oke, Haugen, Hale, Rasmussen and Kohl-Welles

AN ACT Relating to making counties with sudden federal employment losses eligible for the distressed county sales tax credit; and amending RCW 82.14.370.

Referred to Committee on Ways and Means.

SB 6041             by Senators Rasmussen, Roach, Gardner, Patterson, Haugen, Heavey and Johnson

AN ACT Relating to public-private transportation initiatives; and amending RCW 47.46.050.

Referred to Committee on Transportation.

SB 6042             by Senators Roach, Heavey, Thibaudeau, Rasmussen and Johnson

AN ACT Relating to placing tolls or user fees on existing roads, bridges, and facilities through public-private transportation initiatives; and amending RCW 47.46.010.

Referred to Committee on Transportation.

SB 6043             by Senators Roach, Patterson, Rasmussen and Johnson

AN ACT Relating to establishing a toll rate before an advisory vote on public-private transportation initiatives; and amending RCW 47.46.030.

Referred to Committee on Transportation.

SB 6044             by Senators Roach, Rasmussen, Patterson, Haugen, Heavey and Gardner

AN ACT Relating to construction of projects identified under the public-private transportation initiatives; and amending RCW 47.46.040.

Referred to Committee on Transportation.

SB 6045             by Senators Hargrove, Stevens, McCaslin, West, Brown, Kline and Kohl-Welles

AN ACT Relating to an ex-offender transitional work program; adding a new section to chapter 50.62 RCW; creating a new section; and making appropriations.

Referred to Committee on Human Services and Corrections.

MOTION

      On motion of Senator Rasmussen, the following resolution was adopted:

SENATE RESOLUTION 1999-8633

By Senators Rasmussen, Morton, Sheahan and Fraser

      WHEREAS, According to the most recent data available, wheat ranks as the third largest crop in Washington State as measured by farm gate value;

      WHEREAS, Annually, over 165 million bushels were produced on 2.5 million acres of land in the state of Washington;

      WHEREAS, Washington ranks fifth in the nation in the number of bushels of wheat grown in a state and contributes nearly seven percent of the nations production;

      WHEREAS, Washington State is the proud home of many productive areas including Whitman County which is the leading county in the nation in the production of wheat;

      NOW, THEREFORE BE IT RESOLVED, That the men and women involved in wheat farming in Washington State be hereby recognized by the Washington State Senate for their contributions to our rural and state economies.

      Senators Rasmussen, Morton and Hochstatter spoke to Senate Resolution 1999-8633.

INTRODUCTION OF SPECIAL GUESTS

      The President welcomed and introduced members of the Washington State Association of Wheat Growers who were seated in the gallery.

MOTION

      On motion of Senator Rasmussen, the following resolution was adopted:

SENATE RESOLUTION 1999-8622

By Senators Rasmussen, Honeyford, Spanel, Loveland, Spanel, B. Sheldon, Sheahan, Fraser and Johnson

      WHEREAS, The economy of the state of Washington is comprised of diverse activities engaged in by people of varying interests and talents from all walks of life; and

      WHEREAS, Vocational education is vital to the success of our state as an economic leader; and

      WHEREAS, Vocational education is not relegated solely to the higher education system, but begins in Washington's secondary schools; and

      WHEREAS, High school vocational education in Washington is ably represented by vocational student organizations; and

      WHEREAS, Vocational student organizations are comprised of VICA (Vocational Industrial Clubs of America), FFA, FBLA (Future Business Leaders of America), FHA-HERO (Future Homemakers of America), and DECA (Distributive Education Clubs of America); and

      WHEREAS, These organization represent more than 27,000 students from all corners of our state; and

      WHEREAS, Through their involvement in their vocational activities, these students are learning skills not necessarily available to them in the conventional classroom setting; and

      WHEREAS, They are training to become better workers, better leaders, better problem-solvers and decision-makers; as well as better citizens; and

      WHEREAS, Their activities are supported by true public/private partnerships that allow private enterprise to become more fully involved with public schools in shaping the future of our economy and its entrepreneurs and workforce; and

      WHEREAS, These active, forward-thinking, and creative young people are blazing the trail into the future for our state; and

      WHEREAS, Their initiative and leadership today will no doubt inspire many others tomorrow and in the years ahead; and

      WHEREAS, Their example of personal responsibility and of creating opportunity is one that all citizens would do well to emulate;

      NOW, THEREFORE, BE IT RESOLVED, That the members of the Senate of the state of Washington do hereby recognize and honor the hard work and dedication of the state officers of VICA, DECA, FHA, FFA, and FBLA here present and the more than 27,000 members they represent, as well as vocational student organizations and its chairperson. Charlotte Crimmins, who is also the state director of VICA, and thank them for all their efforts on behalf of themselves and their future, as well as the future of the great State of Washington; and

      BE IT FURTHER RESOLVED, That the Secretary of the Senate do hereby immediately transmit copies of this resolution to each of the aforementioned organizations.

      Senators McAuliffe and Honeyford spoke to Senate Resolution 1999-8622.

INTRODUCTION OF SPECIAL GUESTS

      The President welcomed and introduced the Vocational Education Students, who were seated in the gallery.

INTRODUCTION OF SPECIAL GUEST

      The President welcomed and introduced Adjutant General, Major General Gregory Barlow, of the Washington National Guard who was seated in the gallery.

MOTION

      On motion of Senator Brown, the following resolution was adopted:

SENATE RESOLUTION 1999-8628

By Senators Brown, Goings, Eide, Kohl-Welles and Fraser

      WHEREAS, February 20-27 marks Eating Disorders Awareness Week, established by Eating Disorders Awareness and Prevention, Inc., a national, Seattle-based, non-profit organization dedicated to increasing the awareness and prevention of eating disorders; and

      WHEREAS, Eating disorders, including anorexia nervosa, bulimia nervosa, and compulsive overeating, are extreme expressions of a range of weight and food issues experienced by both men and women; and

      WHEREAS, These disorders can lead to a variety of life-threatening physical and mental health problems; and

      WHEREAS, More than five million Americans suffer from eating disorders; and

      WHEREAS, Fifteen percent of young women have substantially disordered eating attitudes and behaviors; and  

      WHEREAS, Our culture’s unrelenting glorification of thinness and the "perfect body" at the expense of physical and emotional health is a contributing factor to eating disorders;

      NOW, THEREFORE, BE IT RESOLVED, That the members of the Washington State Senate recognize that eating disorders are serious diseases that affect the mind and body simultaneously and can have grave medical consequences, especially for our younger population; and

      BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Secretary of the Senate to Eating Disorders Awareness and Prevention, Inc.

INTRODUCTION OF SPECIAL GUEST

      The President welcomed and introduced Joe Lucey, Director of the Behavioral Health Services Program from Swedish Hospital, who was seated in the gallery.

MOTION

      At 10:23 a.m., on motion of Senator Betti Sheldon, the Senate recessed until 10:45 a.m.

      The Senate was called to order at 10:49 a.m. by President Owen.

MOTION

      On motion of Senator Betti Sheldon, the Senate reverted to the sixth order of business.

SECOND READING

      SENATE BILL NO. 5485, by Senators Thibaudeau, Deccio, McDonald, Snyder, Winsley, Kline, Oke and Costa (by request of Attorney General Gregoire)

Regulating certain tobacco product manufacturers.

      The bill was read the second time.

MOTIONS

      On motion of Senator Thibaudeau, the following striking amendment was adopted:

      Strike everything after the enacting clause and insert the following:

       "NEW SECTION. Sec. 1. FINDINGS AND PURPOSE. (a) Cigarette smoking presents serious public health concerns to the State and to the citizens of the State. The Surgeon General has determined that smoking causes lung cancer, heart disease and other serious diseases, and that there are hundreds of thousands of tobacco-related deaths in the United States each year. These diseases most often do not appear until many years after the person in question begins smoking.

       (b) Cigarette smoking also presents serious financial concerns for the State. Under certain health-care programs, the State may have a legal obligation to provide medical assistance to eligible persons for health conditions associated with cigarette smoking, and those persons may have a legal entitlement to receive such medical assistance.

       (c) Under these programs, the State pays millions of dollars each year to provide medical assistance for these persons for health conditions associated with cigarette smoking.

       (d) It is the policy of the State that financial burdens imposed on the State by cigarette smoking be borne by tobacco product manufacturers rather than by the State to the extent that such manufacturers either determine to enter into a settlement with the State or are found culpable by the courts.

       (e) On November 23, 1998, leading United States tobacco product manufacturers entered into a settlement agreement, entitled the "Master Settlement Agreement," with the State. The Master Settlement Agreement obligates these manufacturers, in return for a release of past, present and certain future claims against them as described therein, to pay substantial sums to the State (tied in part to their volume of sales); to fund a national foundation devoted to the interests of public health; and to make substantial changes in their advertising and marketing practices and corporate culture, with the intention of reducing underage smoking.

       (f) It would be contrary to the policy of the State if tobacco product manufacturers who determine not to enter into such a settlement could use a resulting cost advantage to derive large, short-term profits in the years before liability may arise without ensuring that the State will have an eventual source of recovery from them if they are proven to have acted culpably. It is thus in the interest of the State to require that such manufacturers establish a reserve fund to guarantee a source of compensation and to prevent such manufacturers from deriving large, short-term profits and then becoming judgment-proof before liability may arise.

       NEW SECTION. Sec. 2. DEFINITIONS. (a) "Adjusted for inflation" means increased in accordance with the formula for inflation adjustment set forth in Exhibit C to the Master Settlement Agreement.

       (b) "Affiliate" means a person who directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with, another person. Solely for purposes of this definition, the terms "owns," "is owned" and "ownership" mean ownership of an equity interest, or the equivalent thereof, of ten percent or more, and the term "person" means an individual, partnership, committee, association, corporation or any other organization or group of persons.

       (c) "Allocable share" means Allocable Share as that term is defined in the Master Settlement Agreement.

       (d) "Cigarette" means any product that contains nicotine, is intended to be burned or heated under ordinary conditions of use, and consists of or contains (1) any roll of tobacco wrapped in paper or in any substance not containing tobacco; or (2) tobacco, in any form, that is functional in the product, which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette; or (3) any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in clause (1) of this definition. The term "cigarette" includes "roll-your-own" (i.e., any tobacco which, because of its appearance, type, packaging, or labeling is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes). For purposes of this definition of "cigarette," 0.09 ounces of "roll-your-own" tobacco shall constitute one individual "cigarette".

       (e) "Master Settlement Agreement" means the settlement agreement (and related documents) entered into on November 23, 1998 by the State and leading United States tobacco product manufacturers.

       (f) "Qualified escrow fund" means an escrow arrangement with a federally or State chartered financial institution having no affiliation with any tobacco product manufacturer and having assets of at least $1,000,000,000 where such arrangement requires that such financial institution hold the escrowed funds' principal for the benefit of releasing parties and prohibits the tobacco product manufacturer placing the funds into escrow from using, accessing or directing the use of the funds' principal except as consistent with section 3(b) of this Act.

       (g) "Released claims" means Released Claims as that term is defined in the Master Settlement Agreement.

       (h) "Releasing parties" means Releasing Parties as that term is defined in the Master Settlement Agreement.

       (i) "Tobacco Product Manufacturer" means an entity that after the date of enactment of this Act directly (and not exclusively through any affiliate):

       (1) manufactures cigarettes anywhere that such manufacturer intends to be sold in the United States, including cigarettes intended to be sold in the United States through an importer (except where such importer is an original participating manufacturer (as that term is defined in the Master Settlement Agreement) that will be responsible for the payments under the Master Settlement Agreement with respect to such cigarettes as a result of the provisions of subsections II(mm) of the Master Settlement Agreement and that pays the taxes specified in subsection II(z) of the Master Settlement Agreement, and provided that the manufacturer of such cigarettes does not market or advertise such cigarettes in the United States);

       (2) is the first purchaser anywhere for resale in the United States of cigarettes manufactured anywhere that the manufacturer does not intend to be sold in the United States; or

       (3) becomes a successor of an entity described in paragraph (1) or (2).

       The term "Tobacco Product Manufacturer" shall not include an affiliate of a tobacco product manufacturer unless such affiliate itself falls within any of (1)-(3) above.

       (j) "Units sold" means the number of individual cigarettes sold in the State by the applicable tobacco product manufacturer (whether directly or through a distributor, retailer or similar intermediary or intermediaries) during the year in question, as measured by excise taxes collected by the State on packs bearing the excise tax stamp of the State or "roll-your-own" tobacco containers. The department of revenue shall promulgate such regulations as are necessary to ascertain the amount of State excise tax paid on the cigarettes of such tobacco product manufacturer for each year.

       NEW SECTION. Sec. 3. REQUIREMENTS. Any tobacco product manufacturer selling cigarettes to consumers within the State (whether directly or through a distributor, retailer or similar intermediary or intermediaries) after the date of enactment of this Act shall do one of the following:

       (a) become a participating manufacturer (as that term is defined in section II(jj) of the Master Settlement Agreement) and generally perform its financial obligations under the Master Settlement Agreement; or

       (b)(1) place into a qualified escrow fund by April 15 of the year following the year in question the following amounts (as such amounts are adjusted for inflation) --

       1999: $.0094241 per unit sold after the date of enactment of this Act;

       2000: $.0104712 per unit sold;

       for each of 2001 and 2002: $.0136125 per unit sold;

       for each of 2003 through 2006: $.0167539 per unit sold;

       for each of 2007 and each year thereafter: $.0188482 per unit sold.

       (2) A tobacco product manufacturer that places funds into escrow pursuant to paragraph (1) shall receive the interest or other appreciation on such funds as earned. Such funds themselves shall be released from escrow only under the following circumstances --

       (A) to pay a judgment or settlement on any released claim brought against such tobacco product manufacturer by the State or any releasing party located or residing in the State. Funds shall be released from escrow under this subparagraph (i) in the order in which they were placed into escrow and (ii) only to the extent and at the time necessary to make payments required under such judgment or settlement;

       (B) to the extent that a tobacco product manufacturer establishes that the amount it was required to place into escrow in a particular year was greater than the State's allocable share of the total payments that such manufacturer would have been required to make in that year under the Master Settlement Agreement (as determined pursuant to section IX(i)(2) of the Master Settlement Agreement, and before any of the adjustments or offsets described in section IX(i)(3) of that Agreement other than the Inflation Adjustment) had it been a participating manufacturer, the excess shall be released from escrow and revert back to such tobacco product manufacturer; or

       (C) to the extent not released from escrow under subparagraphs (A) or (B), funds shall be released from escrow and revert back to such tobacco product manufacturer twenty-five years after the date on which they were placed into escrow.

       (3) Each tobacco product manufacturer that elects to place funds into escrow pursuant to this subsection shall annually certify to the Attorney General that it is in compliance with this subsection. The Attorney General may bring a civil action on behalf of the State against any tobacco product manufacturer that fails to place into escrow the funds required under this section. Any tobacco product manufacturer that fails in any year to place into escrow the funds required under this section shall --

       (A) be required within 15 days to place such funds into escrow as shall bring it into compliance with this section. The court, upon a finding of a violation of this subsection, may impose a civil penalty to be paid to the general fund of the state in an amount not to exceed 5 percent of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed 100 percent of the original amount improperly withheld from escrow;

       (B) in the case of a knowing violation, be required within 15 days to place such funds into escrow as shall bring it into compliance with this section. The court, upon a finding of a knowing violation of this subsection, may impose a civil penalty to be paid to the general fund of the state in an amount not to exceed 15 percent of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed 300 percent of the original amount improperly withheld from escrow; and

       (C) in the case of a second knowing violation, be prohibited from selling cigarettes to consumers within the State (whether directly or through a distributor, retailer or similar intermediary) for a period not to exceed 2 years.

       Each failure to make an annual deposit required under this section shall constitute a separate violation. The violator shall also pay the State's costs and attorney's fees incurred during a successful prosecution under this paragraph (3).

       NEW SECTION. Sec. 4. Sections 1 through 3 of this act constitute a new chapter in Title 70 RCW.

       NEW SECTION. Sec. 5. Captions used in this act are not part of the law.

       NEW SECTION. Sec. 6. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately."

      On motion of Senator Thibaudeau, the following title amendment was adopted:

      On page 1, line 2 of the title, after "agreement;" strike the remainder of the title and insert "adding a new chapter to Title 70 RCW; creating a new section; prescribing penalties; and declaring an emergency."

MOTION

      On motion of Senator Thibaudeau, the rules were suspended, Engrossed Senate Bill No. 5485 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Debate ensued.

      The President declared the question before the Senate to be the roll call on the final passage of Engrossed Senate Bill No. 5485.

ROLL CALL

      The Secretary called the roll on the final passage of Engrossed Senate Bill No. 5485 and the bill passed the Senate by the following vote: Yeas, 40; Nays, 8; Absent, 0; Excused, 1.

     Voting yea: Senators Bauer, Brown, Costa, Deccio, Eide, Fairley, Franklin, Fraser, Gardner, Goings, Hale, Hargrove, Haugen, Heavey, Horn, Jacobsen, Johnson, Kline, Kohl-Welles, Long, Loveland, McAuliffe, McCaslin, McDonald, Morton, Patterson, Prentice, Rasmussen, Rossi, Sellar, Sheahan, Sheldon, B., Sheldon, T., Shin, Snyder, Spanel, Thibaudeau, West, Winsley and Wojahn - 40.

     Voting nay: Senators Benton, Finkbeiner, Hochstatter, Honeyford, Roach, Stevens, Swecker and Zarelli - 8.

     Excused: Senator Oke - 1.

      ENGROSSED SENATE BILL NO. 5485, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

SECOND READING

      SENATE BILL NO. 5359, by Senators Thibaudeau, Deccio, Wojahn, Winsley, Franklin, Oke, Kohl-Welles and Fairley (by request of Governor Locke and Attorney General Gregoire)

Managing moneys received under tobacco company litigation.

MOTIONS

      On motion of Senator Loveland, Substitute Senate Bill No. 5359 was substituted for Senate Bill No. 5359 and the substitute bill was placed on second reading and read the second time.

      Senator McDonald moved that the following amendments be considered simultaneously and be adopted:

       On page 2, line 4, strike the first "and"

       On page 2, line 5, after "act" and before the period, insert ", and to the education enhancement account for purposes set forth in section 4 of this act"

       On page 2, after line 12, strike all material down to and including line 17 and insert the following:

       "NEW SECTION. Sec. 4. A new section is added to chapter 43.79 RCW to read as follows: